After 6 Years and $26M, Insolvent Chumby Selling Remaining Assets
Alas, poor Chumby! We knew him well.
The Internet-enabled device of infinite jest and excellent fancy is now the unfortunate subject of an asset sale supervised by a trustee—Insolvency Services Group of Beverly Hills, CA, according to Mike Freeman, who broke the story in today’s U-T San Diego. To the creditors go the spoils.
As we reported a few years ago, San Diego’s Chumby Industries was the brainchild of Avalon Ventures’ Steve Tomlin, who conceived of Chumby as a simple Internet-enabled wireless device with a touch-screen that could display the time, weather, traffic, and serve as a music and video player. It was about the size of an old-fashioned clock radio, and had a soft leather look and feel. The Chumby gained capabilities over time, and also could stream Internet radio, YouTube videos, RSS feeds, news, stock prices, and other information. Wired magazine named Chumby to its top gadget list in 2008.
Over the past six years or so, the company raised more than $26 million from Avalon, Masthead Venture Partners, O’Reilly AlphaTech Ventures, JK&B Capital, and others. As Chumby’s founding CEO, Tomlin led much of that fund-raising, secured a manufacturer in China, and built out global distribution and other aspects of the business.
Derrick Oien, a software executive with experience at Redwood City, CA-based Good Technology and San Diego’s Intercasting and MP3, took over as CEO in the fall of 2010. Oien spearheaded a move away from hardware and focused Chumby on licensing its technology and expanding the development of widgets for the Chumby platform.
During Oein’s reign, Chumby collaborated with UK-based Pace to expand into the market for Internet-connected TV and partnered with Best Buy to provide Chumby’s app portfolio to the retailer’s “Insignia” line of Internet-connected products. Sony also licensed technology from Chumby for its “Dash” device and Sony Tablet S.
It was hard to pivot, however. “The first blow was the iPhone, a small device with unbelievable capabilities,” Oien says. “The real blow was cheap tablets, Android tablets. I can stick a tablet on my nightstand and it does everything.”
In our phone call this morning, Oien tells me Chumby’s end became apparent by the end of last year. “We were looking to sell the company,” Oien says. One prospective deal fell through, but Oien managed to arrange what he called a “talent sale” that conveyed about 30 employees and some technology to Technicolor, the multimedia technology company with more than 42,000 patents and a 95-year Hollywood legacy.
The remainder of Chumby was turned over to a liquidation trustee in February. Oien says he has been helping to sell off the remaining assets, which include a variety of technology and patents.
“From an investor perspective, it was a bad outcome,” Oien says. These days, technology evolves at such a breakneck pace—especially Web-based technologies—that the hardware aspect of the business made it difficult to quickly shift the company.
As sad as it was, Oien says he believes someone will pick up the assets. The software created to run funky clock radios on the low-power Chumby device can find broader use running Internet TV, and Oien says most of Chumby’s major partners showed interest in acquiring the technology.
“The cost to keep the network of Chumby devices up is something less than $5,000 a month,” Oien says. “The partners have a vested interest in keeping that going. Chumby will carry on in some form.”
Oien also has moved on. After returning to Avalon for a short time as an entrepreneur-in-residence, he says he’s leading a new startup in Del Mar, CA, called ScoreStream that is using Facebook and Twitter to crowd-source high school sports scores.
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